Dubai: Online shopping and delivery is creating growth boosters for Aramex, which reported 2019 revenues of Dh5.2 billion and a 3 per cent increase on 2018’s Dh5.03 billion.
Net profit gained only 1 per cent to Dh497.4 million.
In the fourth quarter, Aramex registered a one-off impairment of Dh46 million from the divestment of Aramex Global Solutions (AGS).
For the year ahead and further: “We are fast tracking our commercial transformation to encourage accelerated growth in our B2B business lines such as fashion retail, telecommunications, manufacturing, chemicals and healthcare, which will help us diversify our revenue mix,” said Bashar Obeid, CEO.
“To extract more value from that business we are undergoing a restructuring of our commercial teams and processes, and expect it to increase its contribution to our performance in the coming quarters.”
At the end of 2019, total cash in hand was Dh1 billion and free cashflow at Dh294 million.
International sags, but domestic drives
But the gains on ecommerce-led volumes have come at a price – there was “continued pressure on pricing”, especially in the company’s Asian operations. But the e-commerce business from other markets - including the UK and US - witnessed double-digit growth in the fourth quarter.
The international express division business ended with a 4 per cent decline in revenues to Dh673 million in the fourth quarter, essentially from the price pressures.
While we anticipate shipment volumes to continue to demonstrate healthy growth in the coming year, pricing pressure on e-commerce business is expected to continue over the coming period. Our efforts in 2020 will be focused on accelerating our business transformation roadmap to realize synergies and lower cost of doing business on the ground.
But it was compensated by domestic express services, which were up 20 per cent to Dh324 million in the final three months of 2019. These were led by growth in core markets, notably Saudi Arabia, Egypt and UAE. (Excluding the restructuring at its India operations and impact from exchange rate fluctuations, domestic express growth would have reached 26 per cent, the company added.)
“We are pleased with our resilient performance despite headwinds emanating from regional and global economic challenges and pricing pressure on our core business prompted by shifting e-commerce dynamics," said Obeid.